ECO Flashcards
What are the four stages of the economic cycle?
Peak (Highest Point)
Expansion (Rising point)
Contraction (Falling point)
Recession (Low point)
Define: Material Living Standards
This means having higher incomes per person and being able to consume or purchase more goods and services.
Define: Non-Material Living Standards
Refers to the non-material goods and services which improve ones quality of life. These may be personal influences Eg. Pollution, Crime Rates, Family belongings
What measures economic growth?
GDP- the number of goods and services produced in a year.
What are the weaknesses of measuring economic growth in GDP?
Doesn’t take into account size of population
Doesn’t take into account distribution of wealth
Doesn’t take into account inflation
Explain impact on economic activity of changes in GDP:
Recession
GDP- Lowest
Inflation- Lowest
Unemployment- Highest
Spending- Lowest
Explain impact on economic activity of changes in GDP?
Contraction
GDP- Falling
Inflation- Falling
Unemployment- Rising
Spending- Falling
Explain the impact on economic activity of changes in GDP:
Expansion
GDP- Rising
Inflation- Rising
Unemployment- Falling
Spending- Rising
Explain the impact on economic activity of changes:
Peak
GDP- Highest
Inflation- Highest
Unemployment- Lowest
Spending- Highest
Benefits of GDP growth for:
Wealthy Countries
Material living standards go up due to consumers having more money to buy goods and services and having more money to purchase luxury items such as iPods and cars.
Benefits of GDP Growth for:
Poor countries
Allows for greater access to essential materials such as food, sanitation, medicines. Does not allow for consumer spending on luxury items like those consumers in richer countries.
Define: Sustainable Development
The method of expanding the economy’s production levels to meet the needs of goods and services of the present population.
This is done without undermining the ability of the future generation to meet their own needs.
Define: Unsustainable Development
Over fishing is an example of unsustainable development because we are taking too many fish to meet the needs and wants of our population but in doing this we are killing off the species of fish and hindering future generations from fulfilling their own needs.
Define: Monetery Policy
Policies which allow government to lower interest rates by RBA (Reserve Bank of Australia)
Define: Budgetery Policy
Taxes or increase in government expenditure
